Russian business pessimistic about prospects
In a report from consultants Grant Thornton International, businessmen in Russia are highly sceptical about the future of the economy.
Respondents in Brazil turned out to be most bullish about their national economy with 74% expecting growth, followed by India (+58%) and China (+22%). Russia is the only BRIC country where pessimists outnumbered optimists.
GTI says Russia takes 27th place out of total 40 countries that participated in the survey into global optimism.
The optimism index in Russia had been dropping throughout 2011. Starting at 15% in the first quarter it’s now a negative 4%. The trend resembles the European businessman mood during the crisis (-17%), rather than the other BRIC countries’ that have shown growth of about 34%.
Some analysts think there is plenty to push the Russian economy. Tom Mundy chief strategist from Otkritie Bank, says Russia has impressive drivers and quite low risks for development. “The oil prices are still relatively well supported and that means Russian equities which have traded lower by 20% in 2011 against 2010 have a lot way to go to catch up to where they should be”.
Tom Mundy also pointed out that Russia had been acquiring positive image for investors through 2011. “It’s clear that the Kremlin has understood the economic necessity of modernizing and diversifying the economy away from the purely exporting oil and creating a more knowledge based economy – the market will welcome that.Russia will continue to address its image as far as foreign investors are concerned. Russia has made significant progress in 2011: the deal between Rosneft and Exxon was absolutely fundamental and inconceivable four years ago that a deal like that would take place. It’s very encouraging that Russia now is a member of the OECD working group on bribery and corruption, its transparency and national corruption perception index ranking has increased in the course of 2011”, says Tom Mundy
According to Tom Mundy the Russian economy may get hit very hard “if oil prices collapse, Europe breaks up” or investors lose faith if the Russian government fails “to do anything material pushing through the economic reform agenda after the presidential elections”.
Tom Mundy on the main risks and drivers for Russian economy in 2012